"In the spring of 2005, a publicly held dating business called Universal Flirts Inc. gave up on love and did a reverse merger with a Chinese cellphone maker.

According to Securities and Exchange Commission filings, founder Darrell C. Lerner walked away with a 26 percent stake in the Chinese company, Orsus Xelent Technologies Inc. (ORSX.PK). By 2007, Lerner no longer was listed among its top stockholders, even though he never reported selling any of his 7.7 million shares and could not have liquidated large amounts on the open market because of a lack of trading volume.

When Orsus Xelent's stock surged in the fall of that year -- on a wave of publicity about big phone orders that never materialized -- whoever held those shares might have been able to sell them for $20 million or more.

A Sharesleuth investigation found similar discrepancies in the reported share ownership of six other Chinese companies that a low-profile promoter named S. Paul Kelley helped to bring public in the United States between 2005 and 2009.

Our analysis of SEC filings found that tens of millions of shares allocated to the chief executives of the shell companies used in those mergers essentially disappeared - sold or transferred to other parties with little or no disclosure. Based on share prices and trading volumes, we calculated that the people who wound up with the missing shares in the other six companies might have sold them for upwards of $50 million."

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